More than 20 Fiat and Alfa Romeo dealers in California have filed protests against Fiat Chrysler after the automaker substantially rewrote their franchise agreements in December.
Among those filing protests are the dealerships owned by the chairman of the FCA National Dealer Council.
Not all of the protests are identical, but they do contain common themes. Primarily, dealers objected to changes:
- In the facility requirements
- In the obligation of FCA to provide vehicles to the franchisees
- To the legal standard dealers must meet to sell vehicles
- To the definition of products beyond vehicles, such as accessories and parts, which could open the door to third-party distributors
- That shift many dealer obligations from being spelled out in their franchise agreements to easier-to-amend manuals, maintained exclusively by FCA.
"At this point, the new agreement is going to put additional burdens and additional risks on the dealer," said Gavin Hughes, an attorney in Sacramento, Calif., who filed nearly half of the protests in the state. "It's unreasonable for the manufacturer to unilaterally be able to change the terms of a contract."
An FCA spokesman declined to comment on the protests. California is the largest market for the Fiat brand, and the linchpin of FCA's plans to resurrect the Alfa Romeo brand in the United States.
The marked-up franchise agreements were filed with state regulators in California as part of dealer protests. Some of the changes made to the documents seem almost personal. For example, in several instances, the new agreement would now obligate dealers to "energetically, actively, aggressively and effectively" promote, display, sell and lease the vehicles in question.
Other changes take a more direct attack at dealer operations, including the sale of branded merchandise "through any channel of distribution that FCA US may select in its sole discretion" including "persons who are not authorized dealers" of Fiat or Alfa Romeo vehicles.